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American Shipper

IATA urges EC to rethink aviation policy

IATA urges EC to rethink aviation policy

The International Air Transport Association (IATA) believes that recent European Commission policy is costing European airlines nearly euros 6 billion ($8 billion) each year.

   In a speech to the European Aviation Club, Giovanni Bisignani, director general and chief executive officer of IATA, said “The annual cost that the European Commission inflicts on aviation is euros 5.9 billion. This is the legacy of neglect left by the previous commission and it is an enormous burden on the competitiveness of Europe’s airlines.”

   “If we don’t have urgent action to restore a balanced playing field, the European industry will be damaged, not by competition, but by inefficient European systems,” Bisignani said.

   IATA calculated that the cost arises from the following:

   * euros 600 million ($804 million) for new regulations on compensation for denied boarding, cancellations and delays.

   * euros 1.9 billion ($2.5 billion) for not taking responsibility for war risk insurance and security issues.

   * euros 3.4 billion ($4.6 billion) for what IATA sees as inefficient infrastructure and regulation.

   Bisignani urged the Commission to implement an effective single European sky, to enforce effective regulation of monopoly suppliers, to end subsidizes for the rail industry, and for progressive liberalization in general.

   “We have been disappointed in the half measures of the past: Intensifying competition without effective regulation of monopoly suppliers; penalizing airlines for delays but failing to effectively implement the single sky and regulating without understanding,” said Bisignani.

   “Europe’s network airlines are competing in a global market without subsidies. Restructuring, consolidation and careful cost management help them cope with extraordinary challenges like the cost of fuel. But they have a limited future if European policy does not support a competitive industry,” Bisignani said.